Drill, baby, drill - The NZ Way

As the United States shuts down deepwater oil drilling to get it back under control, New Zealand opens the door. Gerry Brownlee may not get much more mining on the conservation estate, but he can get it off-shore. How good is that?

Genial Gerry Brownlee was not ready to concede defeat when he appeared on TV3’s The Nation at the weekend, even though his plan for more mining in the conservation estate seems to be in tatters.

Was he deterred by the 20 or 50 thousand people marching in the largest protest yet against his government – or the 35,000 written submissions berating his proposals – or the series of negative polls - or the 45,000 signature petition the Greens are wheeling towards Parliament? No way.

The people “have probably got the wrong end of the stick”. The whole debate “was somewhat derailed from the start”. A large number of the submissions that came in were from people who have genuine concerns, but probably hadn’t had time to read the consultation document.” There was a poll that showed a “large number of New Zealanders … want to know what’s under the ground in the conservation estate”.

The discussion document he hoped would produce a “non-emotive” and “intellectual debate” was “never given a fair go”. It had been “quite unfairly leaked, I suspect, by a government agency” that he would not, could not name. Investigation had been converted into mining by “scaremongers out there who said we’re going to have, you know, thousands of hectares of the conservation estate ripped up in mines. That was never going to happen.”

He sounded like a man who knew he had lost the public debate, and didn’t care. “What I say is that we’re going through a proper analysis and we are going to have a proper Cabinet process, and we’ll have an announcement in due course,” Brownlee told us.

This proper process is unlikely to see miners moving back onto Great Barrier Island, or extending their operations in the Coromandel. Maybe, on the West Coast, between the one-time mining capitals of Greymouth and Westport, they will enter a couple of corners in the Paparoa National Park, and – well before Brownlee started his broader campaign – he had already won a boundary change that carved a couple of hundred acres out of the new Oteake conservation park in North Otago for lignite mining.

In many ways, Brownlee has been his own worst enemy. In August last year, when he launched his step change plan to unlock the “$194 billion” mineral resource on land administered by the Department of Conservation, he over-blew both the problem and the potential for mining.

He presented restricted access to DoC land as “one of the fundamental barriers to mineral exploration” – when it clearly was not. Then he drew a spurious comparison between the export value generating capacity of mining and dairying.

His $194 billion valuation of the mineral resource was obviously more guesstimate than estimate, in the absence of serious prospecting. He strayed into chalk and cheese country when he compared mining’s export value generation of $175,000 per acre per annum with dairy’s $3,500 per acre contribution, as if exploitation of a finite mineral resource was comparable to managing the constantly renewable process of creating animal protein.

He scored a magnificent own goal, when he fired an ill-judged shot at Labour for issuing 118 permits for mining within the conservation estate, and another 100 for land overlapping onto, or directly adjacent to it. Finally, his long-awaited but well-leaked discussion document revealed that Schedule 4 protection provides for a significant amount of mineral exploration and development.

Brownlee’s prospects for getting a non-emotive, intellectual debate about mining would have been better if he had started where his discussion document ends: with a plan to get some facts about New Zealand’s onshore mineral resource through a $4 million research and investigation programme using “low impact techniques such as airborne geophysical exploration, mapping and sampling by mainly hand-held methods.”

Instead, Mr “Sexy Coal” is picking himself up, dusting himself off, and starting all over again – offshore.

It was just Brownlee’s luck that he landed a taker for rights to carry out deep water petroleum exploration in the Raukumara Basin as the world’s largest oil spill started slurping ashore along the Gulf of Mexico from the ruins of BP’s Deepwater Horizon drilling platform.

His announcement last week simply welcomed the interest shown by Brazil’s home-grown oil giant Petrobras. It made no reference to the Gulf disaster or the fact that his Ministry was simultaneously calling in external consultants to help with a review of New Zealand’s health, safety and environmental legislation, institutional capabilities and practices covering offshore petroleum exploration “to ensure that they are fit for purpose and compare favourably to international best practice.” The Prime Minister was left to pick up the ball and cover that point later in the day.

The review is going to show New Zealand has extremely limited control over off-shore mineral exploration and exploitation practices, particularly beyond 12 nautical miles offshore in New Zealand’s vast exclusive economic zone, where most of our offshore petroleum industry activity is now concentrating.

According to the Ministry for the Environment, New Zealand has no legislation covering the EEZ that requires environmental impact assessments before mining permits are issued or that governs the effects of seismic surveys, exploratory drilling, seabed mining, oil spill management, or on insurance and ownership of liabilities.

Closer to the shoreline, regulatory and protective functions are split between a mishmash of central government agencies and regional councils.

Maritime New Zealand is currently the core regulator of off-shore petroleum installations. Last week, MNZ environmental analyst Alison Lane said regulations in New Zealand require offshore rig operators to prove they have adequate emergency procedures in place during annual audits, but the rules do not specify what systems are necessary.

Maritime New Zealand has just $12 million worth of oil spill recovery equipment and dispersing chemicals scattered in 20 locations around the country, and three 8.2 metre transportable oil recovery vessels – hardly enough to cope with crude oil spewing out of a single malfunctioning deep water wellhead at a rate of up to 3 million litres a day.

As we can now see on a daily basis, deep water drilling is a risky business. New Zealand needs to do more than chant “drill, baby, drill” and count on Brownlee’s Luck.